The case is on the licence renewal of the erstwhile MCX Stock Exchange (MCX-SX, now called Metropolitan Stock Exchange of India or MSEI) in 2010, on which there are charges of malfeasance.
“While the investigation can continue, there is no need to keep him (Shah) in jail,” said judge P S Tarare, rejecting the Central Bureau of Investigation's request for an extension of Shah's jail custody. Shah was arrested by the CBI on September 20, on the charge of suppression of facts in 2010 while seeking renewal of the MCX-SX licence.
Shah’s legal counsel, Arvind Lakhawat, said CBI had registered the case two years earlier. “The matter was six years old. How come CBI took Shah into custody all of a sudden on September 20? He is the only person they have held in this case. None of the accused, including public servants, have been arrested. This shows the high-handed state action, targeting only one individual.”
Adding: “C B Bhave, then chairman of the Securities and Exchange Board of India (Sebi) and K M Abraham, then wholetime member, were the actual decision-makers there at the relevant time but were given a clean chit by CBI in its preliminary inquiry and not even named in the FIR (police case). This shows CBI did not find any criminality in Sebi's decision on renewal of the recognition of MCX-SX. Then, there is no question of booking Shah for allegedly influencing the decision-making.”
Shah was also not the one who filed or signed the application for renewal of recognition. There is no evidence whatsoever of Shah having ever met or spoken to any of the public servants accused, Lakhawat alleged.
The main allegation in the FIR was regarding the alleged suppression of the buy-back arrangements entered into by promoters of MCX-SX. Lakhawat contested this. “That’s because Sebi was fully aware about these buy-back arrangements even prior to the grant of this renewal on August 3, 2010. What is more, the legality and validity of these buy-back arrangements were upheld by the Bombay High Court in March 2012 itself.”